WazirX granted 4-month $230 million debt repayment extension by Singapore court

WazirX co-founder Nischal Shetty said the exchange will use the time to focus on ‘resolution, recovery and restructuring.’

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Since the $230 million hack in July, WazirX has been scrambling to recover the assets and pacify users. The Indian crypto exchange had asked for a six-month moratorium to deal with the crisis. However, a Singapore court granted only four months relief, with conditions, on Thursday, Business Standard reported.

As part of the conditions, WazirX has to reveal the addresses of its wallets in a court affidavit. The exchange is also required to respond to users’ queries and has six weeks to disclose its book of accounts. WazirX will also need to ensure that any voting on its future path is conducted on an independent platform.

The firm, however, sees this as a win. WaxirX co-founder Nischal Shetty said:

“We are thankful for the court’s decision, which allows us to focus on our path to resolution, recovery and restructuring.”

WazirX’s parent company, Singapore-based Zettai, filed for a restructuring on Aug 23. The moratorium will provide temporary relief from legal proceedings, allowing the firm to restructure. 

In a statement shared with Moneycontrol, WazirX said that the court acknowledged its active engagement with creditors and promptness in filing for a moratorium. Shetty further stated:

“Our immediate filing for the moratorium was a decisive step taken to ensure the fastest, fairest, creditor-approved, legally binding path to resolution where creditors have a token choice and potential upside in a bull run.”

According to the court affidavit, WazirX is in various stages of discussions with at least 11 exchanges and has signed NDAs with three. WazirX hopes to find a partner to infuse cash and help it out of the situation.

Earlier this month, WazirX said its users are unlikely to recover 100% of their assets. After partially lifting its withdrawal suspension last month, Wazir has enabled users to withdraw up to 66% of their INR balances. However, it does not have enough reserves to allow users to withdraw their crypto tokens.

WazirX blamed its wallet service provider, Liminal Custody, for the hack, but the company has denied the claims, which an independent reviewer cleared. The exchange has tried several recovery methods, including a bounty program.

Meanwhile, the WazirX hacker is nearly done laundering the stolen assets, with only $6 million Ethereum (ETH) remaining. The hacker has used Tornado Cash, a crypto tumbler that obfuscates the origin of funds.

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